Exam 3: Interdependence and the Gains From Trade

These figures illustrate the production possibilities available to Barney and Betty with 8 hours of labor in their baker Figure 3-4 -Refer to Figure 3-4.If Barney and Betty both specialize in the good in which they have a comparative advantage,

A recently-developed theory asserts that Homo sapiens dominated Neanderthals because

Figure 3-2 -Refer to Figure 3-2.Suppose Ben's production possibilities frontier is based on 4 hours of work and the same true is for Jerry's.Then

Specialization and trade are closely linked to

A country that currently does not trade with other countries could benefit by

Figure 3-3 -Refer to Figure 3-3.Ginger has an absolute advantage in

For the following question(s), use the accompanying table. Table 3-2 -Refer to Table 3-2.We could use the information in the table to draw a production possibilities frontier for Helen and a second production possibilities frontier for Carolyn.If we were to do this,measuring dresses along the horizontal axis,then

Figure 3-3 -Refer to Figure 3-3.In order to maximize total output,

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.) -Refer to Figure 3-5.For Country A,what is the opportunity cost of each additional car that it decides to produce?

Rusty can edit 2 pages in one minute,and he can type 80 words in one minute.Emily can edit 1 page in one minute,and she can type 100 words in one minute.Rusty has an absolute advantage and a comparative advantage in editing,and Emily has an absolute advantage and a comparative advantage in typing.

If Shawn can produce donuts at a lower opportunity cost than Sue,then

Figure 3-3 -Refer to Figure 3-3.How long does it take Fred to make one ballet slipper?

Figure 3-2 -Refer to Figure 3-2.Ben has an absolute advantage in

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.) -Refer to Figure 3-5.Country A would most likely find itself specializing in corn production if it began trading with Country B and

Trade is based on absolute advantage.

For the following question(s), use the accompanying table. Table 3-2 -Refer to Table 3-2.Helen has an absolute advantage in

Figure 3-2 -Refer to Figure 3-2.Suppose Ben's production possibilities frontier is based on 4 hours of work.How much time does Ben require to produce 1 pound of ice cream?

Table 3-5 -Refer to Table 3-5.The United States and Japan could benefit by the United States specializing in

Mark is a computer company executive,earning $200 per hour managing the company and promoting its products.His daughter Regan is a high school student,earning $6 per hour helping her grandmother on the farm.Mark's computer is broken.He can repair it himself in one hour.Regan can repair it in 10 hours.Mark's opportunity cost of repairing the computer is lower than Regan's.

When an economist points out that you and millions of other people are interdependent,he or she is referring to the fact that we all